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davegram

Unearthing my 403B rates

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Hi all,

I'm new to this site, and have come here after listening to the "Teach and Retire Rich" podcast and getting pretty fired up. I'm already loving 403bwise, but I have a lot to learn. Ok, on to my question...

I'm looking to up my contributions. I've been teaching for 20 years. I have both a 403b (Voya Financial) and a Roth IRA (Vanguard). I'm trying to decide whether I should put more into my Roth IRA or my 403b. Although my 403b has performed very well, I am having trouble determining what my fees are. If it turns out my fees are high, I'd prefer to lean more heavily on my Roth IRA.

I've been looking around on Voya Financial's website, but I can't find specific info about fees. I know I could just make an appointment with a rep to discuss, but I don't feel like fending off the hard sell to up contributions, etc. Anyone know an easier way to find this info, or should I just bite the bullet and call my rep? Thanks!

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There’s a website called 403bcompare that lists fees for plans offered in California. It isn’t always up to date. Still, that’ll provide a good proxy for the fees you’re likely paying.

However, if you’re a K-12 teacher, I can almost guarantee you’re paying high fees with Voya. If you can figure out what vendors your district approved for 403bs and 457bs (the lists may differ from each other) then we can tell you what your best option is. If you have no good options, I can teach you how to get your district to add Vanguard and Fidelity.

I don’t know why so many people feel like they have to choose between a Traditional 403b/457b vs a Roth IRA. The decision between Roth vs Traditional should be made independent of whether you’re using a 403b, 457b, IRA, or any other tax advantages account.

Generally speaking, you should max out your IRA because it’ll have lower costs than a 493b/457b. One of the exceptions to this rule is if your 403b waives fees when you hit a certain balance, then you might consider dumping money into the 403b until the fees are waived. I’d need to know everything about your circumstances in order to give a well informed opinion.

You can’t find the fees because they don’t want you to know what the fees are. Voya is a bad actor, I wouldn’t bother with them or their reps. Like I said, identify all of your available vendors. 

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davegram, welcome to the forum! Hopefully you know the name of your particular VOYA 403b contract. There are a number of them:  https://www.403bcompare.com/Vendors/Browse   You can check both of the VOYA vendors on the 403bcompare website. It’s very likely that the fees in CA are the same in other states.

Have you located your district's 403b vendor list? It may be maintained by your HR office or more likely by your district's third party administrator (TPA). Your district's website may have a link to the list. It's likely your VOYA fees are high, but it's possible to transfer your balance to a low-cost custodial account at another vendor if it's on the district 403b vendor list.

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Hi all,

Thanks for the advice. First of all, according to the Voya site the plan is called "665V83 Suffern Central School District 403b"... does that imply we have some sort of customary plan? I cannot find any indication of another name for the plan. I do know the specific funds I'm invested in (two of which are Fidelity funds, so that's promising). I certainly cannot find any information on 403bcompare about that particular plan.

My approved vendors list is as follows:

Voya, Faculty Services Corp (based here in NY), Forester's/First Investors, Legend Services Corp, Met Life, Security Benefit, Axa, Ameriprise Financial, Aig/Valic/Variable, USAA, and the NY 457 Plan. None of those names jump out at me as being praised for low fees....

I think my next step will be to call the Voya rep. I've met with him before. I will be clear that I only want to know precisely what fees I'm paying. I'm fairly certain I'll end up prioritizing fully funding my Roth IRA each year from here on out. The other question is whether I can/should transfer to another vendor. 

Thanks again to you both!

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That’s great news.

Security Benefit’s NEA DirectInvest is an elite 403b plan and I documented it here.

The NYS 457b is also a great plan, the details of which have been discussed several times on this forum in the last month or two. Just use the site’s search feature.

I feel quite confident that Voya isn’t a better option than NEA DirectInvest, but it won’t hurt to do the legwork to prove that out.

Yes, if Voya is more expensive then I’d definitely roll that account over to the Security Benefit’s NEA DirectInvest 403b.

 

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3 hours ago, davegram said:

I think my next step will be to call the Voya rep. I've met with him before. I will be clear that I only want to know precisely what fees I'm paying. I'm fairly certain I'll end up prioritizing fully funding my Roth IRA each year from here on out. The other question is whether I can/should transfer to another vendor. 

It’s possible, but not likely, that VOYA has adjusted their fees for your district to one of their plans. The plan name was probably on the paperwork you signed at the beginning? If you look at the categories of VOYA plans listed in 403bcompare, you see that they offer a Fixed Annuity, a Variable Annuity, a Mutual Fund (custodial account, no new accounts) and an Equity Index Annuity. We can rule out the Fixed Annuity  and an Equity Index Annuity because you have 2 Fidelity funds among others. The custodial account doesn’t offer Fidelity funds so we can rule that one out. I think it’s very likely you have one of their Variable Annuities.

The VOYA Advantage Century (ReliaStar) is a variable annuity and I notice it has several Fidelity funds. This may not be your exact variable annuity, but its fees are probably representative of the type of fees you can have in a variable annuity.

https://www.403bcompare.com/products/207#/fees

Contrafund, ER 0.62%

Index 500, ER 0.10%

Equity-Income, ER 0.53%

Investment Grade Bond, ER 0.40%

 

This variable annuity has the following fees in addition to each fund’s ERs:

Administration fee, 0.15%/yr

Contract fee, $30/yr

Mortality & Expense fee, 1.25%

There’s a “rolling surrender fee” for 6 “contract” years, of 7%, 7%, 6%, 5%, 4% and 2%.

I hope this helps you unearth your 403b fees. I think there is no doubt that you will be better off rolling the VOYA balance into the NEA Direct Invest of Security Benefit.

 

 

 

 

 

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Thanks Krow36, this is very helpful. Although I wish I had researched all of this years ago, there's no time like the present to set a new course. I still have a lot to learn, and I will not make any major decisions until further educate myself, but the more I discover the more displeased I am with this 403b.

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